Strategic Property Holdings No. 3 Pty Ltd v Austbrokers RWA Pty Ltd [2013] NSWSC 178

Supreme Court New South Wales

Medium Neutral Citation: Strategic Property Holdings No. 3 Pty Ltd v Austbrokers RWA Pty Ltd [2013] NSWSC 178 Hearing dates: On the papers: submissions received on 13 February, 20 February, 28 February, 6 March, 7 March and 8 March 2013 Decision date: 11 March 2013 Jurisdiction: Equity Division - Commercial List Before: Stevenson J Decision: Judgment to be entered for plaintiff for figure calculated in accordance with reasons Catchwords: DAMAGES - professional negligence - insurance broker - quantum Legislation Cited: Building and Construction Industry Security of Payment Act 1999 Cases Cited: Strategic Property Holdings No. 3 Pty Ltd v Austbrokers RWA Pty Ltd [2012] NSWSC 1570 Category: Separate question Parties: Strategic Property Holdings No. 3 Pty Limited (first plaintiff) Eclipse Property Group Limited (second plaintiff) Austbrokers RWA Pty Limited (first defendant) Austbrokers Sydney Pty Limited (second defendant) Representation: Counsel: R J Weber SC with W A D Edwards (plaintiffs) R J H Darke SC with H Chiu (defendants) Solicitors: Tresscox (plaintiffs) Lee & Lyons (defendants) File Number(s): SC 2011/32744 Publication restriction: Nil

Judgment 1This is a professional negligence action against an insurance broker. 2On 14 December 2012 I delivered a judgment: Strategic Property Holdings No. 3 Pty Ltd v Austbrokers RWA Pty Ltd [2012] NSWSC 1570. 3In this judgment, I shall use the same abbreviations as I used in my earlier judgment. 4In my earlier judgment, I held that the Broker, by not advising Strategic of the nature and effect of the Sub-Limit under the Policy, acted in breach of its retainer and duty. I held that that breach had caused Strategic loss and that Strategic was entitled to damages. 5For the reasons set forth at [141] - [145] of my earlier judgment, I was not then able to reach any conclusion as to the quantum of damage to which Strategic is entitled. 6Since the date of my earlier judgment the parties have provided written submissions on the question of damages, and have invited me to decide the issue on the papers. 7It is common ground that Strategic is entitled to damages to put it in the position it would have been had the Broker not breached its retainer and duty. On the findings that I made in my earlier judgment, the damages to which Strategic is entitled are those which would put it in the position it would have been had the Policy had a sub-limit of $2 million, rather than $200,000. 8As a result of the roof collapse at the Geddes building on 13 January 2006, Strategic incurred total rectification costs of $3,100,176.75. 9Strategic made a claim on Suncorp under the Policy in respect of those costs. Suncorp paid Strategic $1,256,968.15. The amount paid by Suncorp was referable to damage specifically insured under the Policy (for example removal of debris, temporary protection and loss of rent). This left an amount of $1,843,208.60 of rectification costs which were not covered ("the Insurance Gap"). 10In the Amended Commercial List Statement filed in Court on 26 November 2012, Strategic claimed as damages: - (a)the Insurance Gap of $1,843,208.60; (b)finance costs associated with rectification of the roof of $750,794.42; and (c)legal costs of the ACT Proceedings: $101,228.45. 11There is no dispute as to the latter sum. There is a dispute as to the first two sums.